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Self assessment and US dividends

Hello,

Please can you help with the below scenario from a tax/self assessment point of view : 

The only shares held are about $500 of US shares which have received dividends that had withholding tax of 15% already taken off at source.  No other UK or foreign shares held.

I am unclear if the dividends from these shares are liable to both US withholding tax and UK tax or neither or just US withholding tax.  Please could someone help clarify.

Sam

Comments

  • eskbanker
    eskbanker Posts: 34,156 Forumite
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    If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

    https://www.gov.uk/tax-on-dividends
  • eskbanker said:
    If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

    https://www.gov.uk/tax-on-dividends
    Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    edited 25 January 2023 at 9:28AM
    eskbanker said:
    If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

    https://www.gov.uk/tax-on-dividends
    Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,
    Not reclaimable in the U.K. You would normally receive a credit of the tax paid against the tax due on THAT income in the U.K. As this is NIL in this case, it is lost.
  • Jeremy535897
    Jeremy535897 Posts: 10,616 Forumite
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    edited 22 January at 2:51PM
    eskbanker said:
    If they're the only dividends you've received then they fall within the (UK) dividend allowance of £2K, so no UK tax due:

    https://www.gov.uk/tax-on-dividends
    Thank you.  So no UK tax due.  So regarding the withholding tax already paid, is this reclaimable or is it liable to US withholding tax?  Thanks,
    Not reclaimable in the U.K. You would normally receive a credit of the tax paid against the tax due on THAT income in the U.K. As this is NIL in this case, it is lost.
    There is no claim under the double tax agreement either, as rate of tax the US is entitled to charge in these circumstances is 15%.
  • iwant2asave
    iwant2asave Posts: 157 Forumite
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    edited 25 January 2023 at 4:09PM
    Got it thanks guys - so basically I guess US withholding tax paid on dividends is not reclaimable as part of Foreign tax credit relief on self assessment.
  • Jeremy535897
    Jeremy535897 Posts: 10,616 Forumite
    10,000 Posts Fourth Anniversary Name Dropper
    It would be, if you had paid UK tax on them.
  • It would be, if you had paid UK tax on them.
    Ok... thanks for clarifying that I am liable for US withholding tax and US tax not reclaimable as foreign tax credit relief on US tax paid.
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